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Compare the best fixed-rate mortgages UK 2023
Fix your mortgage rate and start budgeting with confidence.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
A fixed-rate mortgage has an interest rate that stays the same for an agreed period. The fixed period is typically between 2 and 5 years, although some lenders may go up to 10 or 15 years.
If you like the peace of mind that comes from knowing your monthly repayment amount, a fixed-rate mortgage might be right for you.
How does a fixed rate benefit borrowers?
A fixed-rate mortgage benefits those who want to budget with confidence and don’t want their repayments rising due to higher interest rates. These include first-time buyers who are adapting to the routine of making regular repayments and investors who want to ensure that their cash flow isn’t affected by rising interest rates.
If you fix your rate at the bottom of the market, you can reap the benefit of a secure and competitive rate when the rest of the market bears the risk of higher interest rates.
Example: First-time buyer scenario
Phoebe and her husband have decided to purchase a property in Bristol. After speaking with a local mortgage broker, Phoebe learns that she needs to borrow £300,000 to complete the purchase.
After comparing different mortgages recommended by her broker, Phoebe is torn about whether they should opt for a fixed-rate or a variable-rate mortgage. Phoebe knows that she and her husband anticipate having children in the near future and she is concerned about how they would manage their repayments if interest rates rose.
While she is drawn to the competitive features offered with a particular variable-rate mortgage, such as a 100% offset account and the ability to make additional repayments without penalty, Phoebe believes that the certainty and security of a fixed-rate mortgage will better suit their lifestyle.
She decides to lock in a competitive rate of 3.64% over a 5-year term.
* This is a fictional, but realistic, example.
What are the pros and cons of a fixed-rate mortgage?
Here are a range of benefits and drawbacks associated with fixed-rate mortgages.
Pros
- Repayment certainty. Opting for a fixed-rate mortgage offers you the peace of mind in knowing what your repayments will be. This allows you to budget more effectively as repayments remain the same until the fixed-rate period ends.
- Flexible mortgage terms. Fixed-rate mortgages are available from most UK lenders with a variety of terms.
Cons
- Limited features. Some fixed-rate mortgages don’t have the flexibility of variable-rate mortgages.
- Early repayment costs. If you decide to leave a fixed-rate mortgage before the end of the specified term, you typically face a significant cost.
- Lower rates. If the Bank of England slashes the base rate, you could end up with a higher rate compared to that of variable-rate mortgages on the market.
Learn more about the benefits and drawbacks of fixed- and variable-rate mortgages.
When is it not a good idea to opt for a fixed rate?
As interest rates are unpredictable, you shouldn’t take out a fixed-rate mortgage if you are simply trying to beat the market. This should not form the basis of your decision. A fixed interest rate may not be a good idea if you:
- Plan to increase your mortgage.
- Intend to sell your property.
- Want to make additional repayments.
- Want to remortgage to a variable-rate mortgage during the fixed term.
- Want competitive and flexible features.
Different fixed-rate scenarios
Let’s look at some different situations to see if a fixed-rate mortgage is suitable.
I’m planning to move houses soon. Does a fixed-rate mortgage suit me?
It’s best to avoid moving out until the fixed term has finished to avoid remortgaging. Remortgaging during the fixed-rate period will incur early repayment fees.
One option is to opt for a fixed-rate mortgage that comes with a portability option that lets you transfer your existing mortgage to the new property.
I’m currently stuck with a fixed-rate mortgage that has a high interest rate. Can I remortgage?
Unfortunately, remortgaging during the fixed term period will incur a range of fees. However, if your current interest rate is very high, it may be worth remortgaging to a lower interest rate.
Can I negotiate a fixed interest rate?
You can definitely negotiate your interest rate before you settle your mortgage. However, it’s not possible to negotiate your rate during the term.
The bottom line
Ultimately, a fixed rate mortgage is likely to be something you may want to consider if you have reasons to value the stability and predictability that a fix represents. If, as in the first-time buyer scenario we’ve outlined above, you’re planning to start a family or preparing for other long-term financial commitments, being able to budget more easily may be something you value.
Just make sure you’re aware of the fees that typically accompany fixed rate mortgages, as compared to a standard variable or tracker mortgage type.
Frequently asked questions
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.
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